Retail: Adding Clicks to Brick-and-Mortar

As e-commerce sales in the U.S. continue to gain wallet share from brick-and-mortar stores, legacy retailers are faced with a moment of truth: How can they rapidly adapt and compete in a digital world?

Successful online retailers, such as Amazon and Zappos, originated from a purely digital platform. Their data analytics capture a picture of shopping behavior down to the individual, even predicting consumer preferences and making real-time recommendations. Some retailers, however, are trapped by legacy systems and siloed architectures, where the only digital footprint might be a credit card payment. While Amazon and other fast movers can quickly implement a new service, a legacy retailer might take months to roll out a new program across its chain of brick-and-mortar locations.

It’s time for retailers to reimagine the physical shopping experience, and to harness the power of digital capabilities. Amazon understands this merging of two worlds is the next frontier, and is now testing its new concept store ‘Amazon Go’ as its own modern take on traditional storefront commerce.

But motivated legacy retailers can seize the opportunity to revitalize their business by embracing some of the same digital technology and best practices as agile digital retailers.

There are a variety of ways brick-and-mortar retail blends the digital with the physical, thereby transforming the shopping experience:

Stock Smart Inventory: A recent trend found many shoppers research an item online, then go to the physical store to make a final decision. If a retailer can track a specific product people are looking for online in a particular region, then they can make sure that the brand is locally available and offer competitive pricing comparable to the common online price. This increases the likelihood of a purchase happening in-store, rather than with an online competitor.

Empower Sales Staff: Equip sales associates on the retail floor with tablets and smart POS terminals, which are connected to inventory, order fulfillment, and customer service systems. If a customer cannot find an item on the shelf, the sale can be saved if an associate can find that product in an online inventory and arrange for it to be shipped directly to the customer or picked up in-store. This also gives employees the ability to recommend products using predictive analytics that are tailored to the customers’ unique interests or buying habits.

Eliminate Customer Purchase Friction: Provide customers with more automated, self-service options; let the physical store act as the last step in an online transaction. For example, Starbucks allows for customized coffee orders via its mobile app with pickup in the store and no waiting in line. Both physical and online mediums are blended to ensure a seamless shopping experience within the contained ecosystem of the retailer. Panera has seen widespread adoption from its Café 2.0 kiosk and mobile app concept, reducing wait times while increasing the value of customer orders made via kiosks. One step further is Amazon Go’s smart convenience stores, which seek to remove the cashier altogether and, through a combination of intergrated sensor technologies, allow shoppers to walk out with items automatically billed to their online accounts.

Think Click-and-Mortar: Smart phone devices in physical stores provide a direct conduit to the eyes and wallets of consumers. Virtual Bluetooth Low Energy (vBLE) beacons can enable real-time location tracking for proximity-based experiences. Imagine being able to send a mobile alert to in-store shoppers that would highlight certain products or sales promotions. Native integration between mobile app and WiFi networks is creating a “fast lane” for retail services. WWT is currently working with both Cisco and Apple on projects that add an intelligent bridge between these two mediums. For example, a retail app interfacing with the network in a store would recognize when a customer arrives, and deliver a personalized, virtual concierge experience to their phone consisting of special services, promotional offers, and hassle-free payments. In-store WiFi can be customized to provide real-time insights into the demographics of shoppers who connect to the network, and the data later utilized to tailor store inventory.

All these examples depend on an omni-channel architecture where information flows easily from back-end to front-end systems at the point of customer interaction, whether online or in-store. However, few physical retailers have achieved this omni-channel view. When it comes to knowing what to sell, how to price, where to put in place, and what to stock, they are essentially operating with an incomplete view of their customers.

Legacy retailers can get dragged down by their siloed data infrastructure. They were never envisioned to be interoperable within a grander, omni-channel architecture. Just getting real-time inventory data to appear on a mobile app requires complex integration work. The key for overcoming this barrier is to test, test, and test. This is where experienced integrators, who have resources and expertise to build an omni-channel architecture from the ground up, become a huge asset for legacy retailers.

WWT’s Advanced Technology Center (ATC) can digitize retail legacy systems to accommodate mobile shopping and predictive analytics for the purpose of understanding shopping habits, controlling inventory, and personalizing customer engagements. WWT provides a secure and agile environment where new innovations can be tested before they are rolled out. Ideas such as BLEs and WiFi tracking can be quickly validated, and then integrated into a retailer’s supply chain using the same systems on which it was tested. What might take a legacy retailer years to get off the ground, can now be up and running within a matter of months.

The first, most essential step is to set aside current capabilities and envision what shoppers’ journeys could be. Then work with a system integrator like WWT to build the technology architecture to support the omni-channel vision. With a fresh mindset, legacy retailers can reinterpret the customer experience and set a new standard for brick-and-mortar in the 21st century.

Additional Resources

This workshop is intended to help administrators, engineers, architects and technical personnel to define and build a basic service model and understand the skills and techniques vital to NSO service modeling.